FIRST SOLAR INVESTOR OVERVIEW

Transcription

1 FIRST SOLAR INVESTOR OVERVIEW

2 IMPORTANT INFORMATION Forward Looking Statements This presentation contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of These forward-looking statements include statements, among other things, concerning effects on our financial statements and guidance resulting from certain module manufacturing changes and associated restructuring activities; our business strategy, including anticipated trends and developments in and management plans for our business and the markets in which we operate; future financial results, operating results, revenues, gross margin, operating expenses, products, projected costs (including estimated future module collection and recycling costs), warranties, solar module technology and cost reduction roadmaps, restructuring, product reliability, investments in unconsolidated affiliates and capital expenditures; our anticipated module shipments; our anticipated bookings opportunities by stage and geography; our ability to continue to reduce the cost per watt of our solar modules; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; our ability to expand manufacturing capacity worldwide; our ability to reduce the costs to construct PV solar power systems; research and development programs and our ability to improve the conversion efficiency of our solar modules; sales and marketing initiatives; and competition. These forward-looking statements are often characterized by the use of words such as "estimate," "expect," "anticipate," "project," "plan," "intend," "seek," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict," "continue" and the negative or plural of these words and other comparable terminology. The forward-looking statements in this presentation are based on current information and expectations, are subject to uncertainties and changes in circumstances, and do not constitute guarantees of future performance. Those statements involve a number of factors that could cause actual results to differ materially from those statements, including the risks as described in First Solar, Inc. s ( First Solar or the Company ) most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. First Solar assumes no obligation to update any forward-looking information contained in this presentation or with respect to the announcements described herein. Non-GAAP Financial Measures This presentation includes the presentation and discussion of certain financial information that differs from what is reported under generally accepted accounting principles in the United States ( GAAP ). These non-gaap financial measures include non-gaap earnings per fully diluted share ( EPS ), free cash flow, adjusted operating expenses, adjusted operating income and non-gaap guidance for EPS, operating expenses and operating income. See the Appendix for a reconciliation of each of these non-gaap financial measures to its most directly comparable GAAP measure and further information regarding such measures. Investors and other readers should consider non-gaap measures only as supplements to, not as substitutes for or superior to, measures of financial performance prepared in accordance with GAAP. 2

3 INVESTMENT THESIS Solar Market Global Solar Demand Continues to Grow Rapidly ; 2017 Demand of ~90 GWs* Cost of Solar Competitive with Traditional Generation Sources (With No Fuel Price Risk) First Solar Advantage Differentiated Thin Film Technology Combines Low Cost and High Efficiency Proven Track Record with >17 GWs of Modules Sold Worldwide Industry Leading Balance Sheet to Invest in Disruptive Technology Roadmap *Estimated PV Installs by IHS (PV Demand Tracker Q3 2017) Applies to certain markets with high solar irradiance 3

4 CORPORATE OVERVIEW

5 SOLAR ENERGY IS COMPETITIVE TODAY ON AN UNSUBSIDIZED BASIS $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $- Coal Nuclear Gas CC Gas Peaking Diesel First Solar Source: Lazard Levelized Cost of Energy Analysis Version 11. First Solar LCOE excludes ITC benefit and assumes a 30MW system in a high insolation region, such as the Southwest U.S. 5

6 FIRST SOLAR AT A GLANCE Over 17GW sold worldwide and over $14.5B in project financing facilitated Partner of choice for leading utilities and global power buyers since 2006 Solar energy that is economically competitive with fossil fuel Strongest financial stability & bankability in the industry 6

7 TRUSTED PARTNER We create enduring value for our customers by powering their worlds through clean and affordable energy. Mark Widmar First Solar CEO 7

8 TECHNOLOGY & MANUFACTURING ADVANTAGE

9 FIRST SOLAR MANUFACTURING ADVANTAGE First Solar Fully Integrated, Automated and Continuous Thin Film Process < 3.5 HRS 1 Factory Large glass substrate vs. individual Si wafers Fully integrated, continuous process GLASS Semiconductor Deposition Cell Definition Final Assembly & Test First Solar MODULE 98% less semiconductor material vs Si Quality controlled under one roof Polysilicon Output Ingot Output Wafer Output Solar Cell Output Module Crystalline Silicon Wafer Based Batch Technology < 3 DAYS 4+ Factories 9

10 UNPRECEDENTED EFFICIENCY IMPROVEMENTS 26.0% 24.0% 22.0% 20.4% 21.5% 22.1% Record Cell 20.0% 18.0% 16.0% 17.3% 14.4% 18.7% 16.1% 17.0% 14.4% 18.2% 16.1% 19.0% 16.6% Record Module Fleet Average * 14.0% 12.9% 13.4% 12.0% Record Cell Efficiency Record Module Efficiency Fleet Average Efficiency* * Represents Q4 full fleet average. 10

11 SPECIFIC ANNUAL ENERGY YIELD ADVANTAGE (RELATIVE TO FRAMED BSF AND PERC, MULTI AND MONO) 9 January

12 ENERGY YIELD ADVANTAGE VS. C-SI Powered by: 12

13 PROVIDING THE LEADING ECO-EFFICIENT PV TECHNOLOGY proven energy advantage economically competitive with fossil fuel lowest environmental impacts Validated by 3rd party research and global peer reviews Higher energy yields at a competitive cost Fastest energy payback time < 1 year Smallest carbon footprint and air pollutants Lowest life cycle water use Industry leading PV recycling program Creating MORE VALUE with LESS ENVIRONMENTAL IMPACT. Seitz et al., Eco-Efficiency Analysis of Photovoltaic Modules, Bavarian State Ministry of Environment and Health,

14 PRODUCT ROADMAP & SERIES 6 ADVANTAGE

15 $0.19 $0.14 $0.09 $0.04 -$0.01 -$0.06 c Si ASP $0.45 $0.35 $0.25 $0.15 $0.05 -$0.05 -$ VARIOUS January 2018 SERIES 6 PRODUCT ADVANTAGE ASP Entitlement ($/Wdc)* (not to scale) Net +6c/W ASP entitlement S6 vs S4 Lowest CpW (not to scale) CpW ~40% lower S6 vs S4** Higher BOS Energy Advantage (0.02) (0.06 c-si Series 4 Series 6 c-si Series 4 Series 6 *Illustrative example. Energy advantage and added BOS cost varies based on geography, site specific factors, PPA pricing and various other factors. Comparison to 340 watt crystalline silicon panel. **S4 cost per watt is 2016 average ; S6 cost is fully ramped cost, not including start-up effects 15

16 SERIES 6 MODULE GROSS MARGIN Indicative / Not To Scale >20%** 15-20% ~12%* <12%* Competitor Reported GM % Freight, Warranty Competitor Adjusted GM % CpW Advantage Energy Yield Advantage BOS Penalty Series 4 GM % BOS Penalty Elimination CpW Reduction Series 6 GM % *Based on last twelve months competitors gross margins (includes CSIQ, HQCL, JASO, JKS, YGE) from public filings. ** FS gross margin excludes ramp penalty 16

17 MW MODULE CAPACITY DECEMBER 17 PLAN OF RECORD 6, Series 4 Series 6 5,700 5,000 Series 4 4,400 4,000 Series 6 9,350 13,750 3,000 2,000 1,

18 HOW WE GET TO OVER 6 GW S CAPACITY MALAYSIA S4 FACTORY MW NAMEPLATE MALAYSIA S4 FACTORY MW NAMEPLATE MALAYSIA S6 FACTORY 2 OHIO S6 FACTORY 600MW NAMEPLATE MALAYSIA S6 FACTORY MW NAMEPLATE VIETNAM S6 FACTORY MW NAMEPLATE VIETNAM S6 FACTORY MW NAMEPLATE Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18

19 FINANCIALS & GUIDANCE

20 Net (Debt)/Cash in $ millions Defaulted Defaulted INDUSTRY LEADING BALANCE SHEET 3,000 Net Cash Position 2,000 1,000 0 (1,000) (2,000) (3,000) Net Debt Position First Solar Competitor A Competitor B Competitor C Competitor D Competitor E Competitor F Net Interest Income (Exp) $5M ($47M) ($43M) ($51M) ($81M) ($95M) ($98M) Source: Net cash/debt based on Q3 17 public filings. Jinko Solar, Yingli Solar based on Q2 17 filings. Net interest expense is last 12 months as reported in company filings. 20

21 EFFECTIVE OPEX MANAGEMENT $m $/W R&D SG&A OpEx per Watt produced E 2018E - *2017 and 2018 operating expense based on guidance mid-points. Excludes restructuring and plant start-up 21

22 2018 GUIDANCE: CONTEXT TAX REFORM: Guidance based on existing tax law 201 TRADE CASE: Outcome remains uncertain Limited potential impact to 2018 guidance 8POINT3 SALE: Sale process ongoing Guidance assumes no change in ownership RESTRUCTURING: Limited 2018 restructuring expense (~$10M) ACCOUNTING: Updated segment reporting 22

23 2018 GUIDANCE: ASSUMPTIONS AS OF DECEMBER 5, 2017 PRODUCTION CAPACITY: ~2.9GW dc (1.9 GW Series 4, 1 GW Series 6) VOLUME SOLD: ~2.8GW dc (1.6 GW module, 0.9 GW development, 0.3 GW EPC) REVENUE MIX: 20% - 25% module 75% - 80% systems DEVELOPMENT SALES: US: California Flats (2 nd phase), Rosamond, Willow Springs International: Japan, India & Australia projects SERIES 6 EXPANSION: Ramp Penalty (COGS): Approximately $60M Plant Start-Up (OPEX): Approximately $110M 23

24 2018 GUIDANCE: AS OF DECEMBER 5, GAAP Guidance Net Sales $2.3B to $2.5B Gross Margin (%) 22% to 23% Operating Expenses $400M to $410M Operating Income 1 $110M to $170M Earnings Per Share 1 $1.25 to $1.75 Net Cash Balance 2 $1.6B to $1.8B Operating Cash Flow $100M to $200M Capital Expenditures $650M to $750M Shipments 2.7GW to 2.8GW ~$60M of ramp penalty included in COGS ~$110M of plant start-up included in OpEx SERIES 6 1 Includes approximately $10M of restructuring related charges. 2 - Cash and marketable securities less expected debt at the end of

25 January 2018 SERIES 6: 5.4GW PRODUCTION CAPACITY BY YEAR END Capex ($M) ~$450 ~$650 $150 $250 $50 $100 ADDITIONAL COGS & OPEX ASSOCIATED WITH SERIES 6 EXPANSION ~$170 M Ramp penalty (COGS) 60 Start-up expense (OpEx) ~$50 M ~$50 M ~$50 M

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